Regardless of the size of your company – the ability to identify and solve problems is something that businesses are always going to require. One way of looking at process improvement toolsets like Lean and Six Sigma are as problem solving techniques – structured ways of overcoming the challenges that businesses face.
But at a time when the spoils go to innovators like Apple, is the rigid application of the Lean Six Sigma toolset hindering rather than helping?
In this PEX Network interview, a transcript of a Process Perspectives podcast, Pierre Nader, Head of Process Excellence and Total Quality Management at du Telecom, the second largest telecommunications provider in the United Arab Emirates, discusses why continuous improvement and innovation must come together to create a platform for operational excellence.
He argues that companies pursuing either innovation or operational excellence - rather than combing the two – risks damaging the company’s prospects. The innovators without operational excellence will be penalized for their chaotic processes while those who pursue operational excellence without innovation will be doomed to eventual irrelevance. He also discusses an approach called Applied Creativity that he has been using within du Telecom to come up with new ideas to solving business problems.
Please note this transcript has been edited for readability. To listen to the original podcast please click here: Solving problems creatively.
PEX Network: What do you think are the limitations of some of the traditional Lean Six Sigma deployments that we saw in the late 1990s and the early part of this century?
Pierre Nader: Traditionally, Lean Six Sigma concepts found an easy home in manufacturing based activities. They then rapidly spread into new types of workflows such as product development and even transactional processes enabling companies to save many billions of dollars in savings. These methods are great at gleaning value from existing systems.
Where these methodologies often fall short is when industries need to adapt to changes and market dynamics. If you want to introduce innovation you need to create a sustained engine of innovation and engine of new customer value creation. In other words, whenever you’re trying to create a breakthrough that’s often when they run short.
PEX Network: You’ve said that continuous improvement and innovation really need to come together. Why do you think it’s important to bring those two different concepts together?
Pierre Nader: The aim of every company is growth, and the fear of every company is contraction. The idea here is you need both of these approaches – Lean Six Sigma and Innovation - to grow. If you have a myopic organization and culture, there is a thought process that leads to the assumption that we must do one or the other. Whether the culture is highly functional or highly innovative, the question really is how might we get the benefits of both sides while at the same time reducing or eliminating the down sides of each?
Whenever you look at Lean and innovation the key is having both - you can’t choose one or the other. By applying the discipline of Lean Six Sigma along with innovation, your organization gets the best of both worlds.
PEX Network: So if I were to summarize, you don’t want to be an innovative company that’s completely chaotic, but vice versa you don’t want to be a very standardized disciplined company that’s doing the wrong thing on old ideas?
Pierre Nader: Especially in difficult times like this.
PEX Network: What does innovation look like in this context? Is there a new term that we should be using? Is it like disciplined innovation or structured innovation?
Pierre Nader: Innovation is new product offerings, new value propositions, breakthroughs, the structure of solutions, freedom, and constant movement towards your growth and towards your goals... all of these to me are innovation. Innovation is really whenever you have got a problem, a challenge, and you turn that challenge into a value proposition or a customer offering.
PEX Network: I suppose then process comes along to help enable that innovation. Now, I understand you’ve been using something called Applied Creativity Techniques in your current role at du Telecoms. What is applied creativity and how have you been using it?
Pierre Nader: Applied Creativity - or the word Simplex System - is basically a method that really helps people think more innovatively. This methodology was invented by a gentleman by the name of Dr Min Basadur and I was lucky to be trained on this methodology in my previous company. Basically the system is simple and it’s experiential. It’s a three phase process of creative problem solving and innovative thinking that helps individuals to solve complex problems that are thrown at them, uncover fresh opportunities and then take them to action.
The first phase is called the problem formulation and the simplex process. It involves three steps, which is the problem finding, the fact finding and problem definition. It’s specifically designed to deal with complex and unstructured problems. In these situations we initially take a neutral stance, which is starting with a fuzzy situation. The Simplex sees the fuzzy situation as simple, as a starting point. The fact finding builds a more complete understanding of the situation and sets the stage for problem definition. The problem definition in Simplex recognizes that in complex problems there can be a group of inter-related challenges. More and more of these challenges basically may represent a starting point to address the overall situation.
So that takes care of the problem formulation. The second step is the solution formulation and that involves two steps, which are the idea of finding and the evaluation and selection. So an idea of finding really is to first generate ideas and those ideas deemed worthy of additional consideration are taken forward into the evaluate and the select step. There the criteria are basically developed and the participants evaluate these ideas using a criteria charted as a kind of a tool to promote discussions and understanding of their strengths and their weaknesses. This learning really sets the stage to develop a solution statement, which is a clear, concise statement that describes your approach.
Finally, you go through the solution implementation which involves a three step process which is planning, gaining acceptance and action. The planning really utilizes and involves creating an action plan to implement the solution. The gaining acceptance step really recognizes that many proposed solutions require approval to go forward and basically a simple selling model based on identifying benefits and concerns, as well as providing solid evidence and soliciting really executive support, is included. Then, finally, you have the action and implementation of the action plan.
These steps happen through a series of workshops to really transfer this process knowledge and skills to workshop participants. You use Applied Creativity in a kind of workshop fashion with a group all the way from ten, 20 to 30, even to 40 individuals and I have seen it going from a one day workshop all the way to five day workshops.
The way I have used it here at du Telecoms is I’ve taken it to the next level. I’m a Lean Six Sigma Master Black Belt myself, and when I was introduced to Applied Creativity, I was able to marry the two together. Lean Six Sigma is based on DMAIC and now you have got the DMAIC methodology which is to define and then generalize, improve and control, and what I was able to do basically, I was able to bring together the applied creativity and the DMAIC approach and use part of the applied creativity in some sorts of the phases in the DMAIC.
To be able to do this, you basically need to know exactly what your output is going to look like and why do you need to use that particular tool there to add the value and to power the DMAIC methodology. Really what one methodology really does, the other complements. If you introduce it in the right way, it actually complements the other methodology because Lean Six Sigma is all about optimization but applied creativity is about pattern breaking and marrying these two really gives you a very powerful toolkit, especially when you’re trying to solve problems. That’s really the secret of success.
PEX Network: What kinds of results have you seen in applying these types of techniques?
Pierre Nader: I have this working strategy development, for instance. Whenever there is a need for business leaders to come up with their balance scorecards or their strategy, their mission and their vision, I often get asked to help the C-level in defining their strategy and their vision. I’ve seen it also here currently at du where we’re working on setting up the strategy for our retail and our marketing division, and I’ve seen it also when I am marrying it with Lean Six Sigma whenever we are trying to drive process in engineering because they’re using it to drive customer satisfaction which is driving customer churn, which is also leading to having new generations.
So, in a nutshell, I’ve seen it in reduction of churn, I’ve seen it in reduction of time to market, increasing share of services, and I’ve seen it in procurement, I’ve seen it in a reduction of call volume, I’ve seen it in a lot of areas here at du.
PEX Network: My final question then is, do you think we’re in the midst of a big change to how companies actually approach process improvement, both in terms of techniques and methodologies?
Pierre Nader: Technology is evolving and so do companies and so does timing. We are in a time now whereby we need to be creative. We need to even be creative in the way we solve problems. For sure innovation tends to occur really when there is a need for innovation, but on the other hand during this tough time when recession is really knocking on our doors, we need to equip each company to make sure each leader or the leadership of every company needs to make sure that the people on the ground are actually equipped with enough methodology in their pocket so that when they are faced with any issues they are aware of what sort of tools are made available to them, either via training or via hands on, what sort of tools are actually available to them so that when they face any problem from innovation or problem solving or anything that they actually face on their day to day life, they are able actually to pick up that right tool be it Lean, that right tool be it Six Sigma, that tool be it creative problem solving and applied creativity.
The beauty here is when the leadership really cares about the people working on the shop floor or in the back office, when they really show that they care about these people and about their growth, that’s when you tend to have a positive aura in the organization. That’s when people often feel that management really care for my development and therefore I really care about picking up this right tool and about really making a difference. And that’s really when you would see a positive vibe in the organization and people are actually responding well to all of these initiatives.
The worst really is whenever you have got a challenge or whenever you have got a problem and as a knee jerk reaction, management often comes up and starts implementing the first thing that comes into their head which is slashing overheads. That’s obviously the worst thing that could ever happen and that often indicates that that specific company hasn’t really been prepared or equipped for the worst and they haven’t really been equipping their workforce with the different methodologies.
So the answer to your question is every company needs to make sure that they actually train their workforce on many methodologies because you never know what sort of methodology you would just be pleased to have in your pocket.